Haas Professors Teece, Gârleanu, Morse Honored for Excellence in Research and Scholarly Service
January 22, 2013
Berkeley-Haas professors David Teece, Nicolae Gârleanu, and Adair Morse have been honored for their research achievements and excellence in their respective academic fields.
Prof. David Teece, the Thomas W. Tusher Professor in Global Business and faculty director of the Institute for Business Innovation, received the Royal Honour of Companion of the New Zealand Order of Merit. Associate Prof. Nicolae Gârleanu , the Paul H. Stephens Chair in Applied Investment Analysis, is the winner of the Smith Breeden Prize from the Journal of Finance. Assistant Prof. Adair Morse, a visiting professor in the Haas Finance Group, is the recipient of the Journal of Finance’s Brattle Prize.
Teece received the Companion of the New Zealand Order of Merit for his services to New Zealand/United States relations. It is a Royal Honour and is made by the Governor General on behalf of Queen Elizabeth II. The Order of Merit is awarded to those “who in any field of endeavor have rendered meritorious service to the Crown and nation or who have become distinguished by their eminence, talents, contributions or other merits.”
Teece holds multiple directorships of business and policy groups and is a leading scholar in the fields of corporate strategy and innovation. A 2008 analysis by Thomson Scientific found him to be one of the top-10 most-cited scholars in economics and business from 1997 to 2007. He has been recognized by Accenture as one of the world's top 50 business intellectuals. In addition, he is among the "A-List of Management Academics 2011," an honorary group of 30 accomplished and distinguished U.S. business professors. He holds four honorary doctorates.
In 2001, Teece cofounded the Kea Global Network. The not-for-profit organization aims to increase trade by providing New Zealand businesses with greater access to international markets and U.S. companies’ greater access to the New Zealand and Australian markets. Teece has assisted many startup companies in the United States and elsewhere. Teece also pioneered Mt. Beautiful Vineyards in North Canterbury, New Zealand. In addition to his role at Berkeley-Haas, Teece is chairman of the Berkeley Research Group LLC (BRG), a global consulting firm that provides expert testimony, strategic advice, and data analytics to government and private businesses.
Smith Breeden Prize
Each year, the Journal of Finance recognizes three finance research papers (other than corporate finance) for excellence. Gârleanu’s winning paper, “Technological Growth and Asset Pricing,” is co-authored by Stavros Panageas of the University of Chicago’s Booth School of Business and Jianfeng Yu of the University of Minnesota’s Carlson School of Management.
The paper explores the phenomenon that financial-asset returns tend to predict such ``real’’ quantities as GDP growth. The reason is that stock and bond prices react instantly to news of technological breakthroughs, such as the Internet, while implementation and achieving economies of scale in production can take many years.
“Given that such breakthroughs tend to happen only occasionally, technological cycles arise naturally. The breakthrough is made and, at some later time only, early adopters start implementing the technology, followed by more and more firms, until it permeates the entire economy,” says Gârleanu. “Our paper models this phenomenon and carefully studies its implications for financial returns (such as stock prices and interest rates) and real quantities (e.g., GDP), and in particular the relation between the two throughout a cycle.”
Gârleanu is also the 2012 recipient of the Review for Financial Studies’ prestigious Barclays Global Investors Michael Brennan award for his paper, “Margin-Based Asset Pricing and Deviations from the Law of One Price,” co-authored by Lasse Pederson, NYU’s Stern School of Business. The paper found that assets with virtually identical cash flows, such as corporate bonds insured with default swaps (CDS) and Treasury bonds, offered different returns during the financial crisis because lower margin assets present lower risk and require a lower capital contribution from investors.
Morse’s paper on how to use psychology-induced methods to improve disclosure on consumer borrowing products earned her the prestigious, first place Brattle Prize. The prize is awarded annually by the Brattle Group, an economic and financial experts consultancy, for outstanding papers in the field of corporate finance published in the Journal of Finance.
Morse’s paper, “Information Disclosure, Cognitive Biases and Payday Borrowing,” was co-authored by Marianne Bertrand of the University of Chicago’s Booth School of Business. The authors assert that individuals who borrow quick cash from payday lenders may not use this service optimally because they may not fully understand the product or because they have biases about their own behavior, such as their ability to pay back a loan quickly.
The study showed that disclosing more information on the accumulation of fees over time from using payday loans impacts borrowing decisions. Getting consumers to think about the broader implications of payday loans, in particular to adding up of costs over time, they found, reduced the amount of borrowing by about 11 percent in a four-month window following exposure to the new information.
“I was elated to hear my name announced for the Brattle Prize. It is such a thrill to know that the best minds in finance voted to honor me for my research,” says Morse.